Construction workers erect walls to replace shop facades at the first floor of an apartment building on Tuanjiehu Road, Beijing on Monday, part of a local government crackdown on illegal construction. Photo: Liu Caiyu/GT

It was a windy day in Beijing. Gu, a 31-year-old woman from East China's Anhui Province, moved her store's shelves outside its demolished facade at the bottom of an apartment building in Chaoyang district, trying to shift the last few bottles of wine and boxes of cigarettes she had in stock.

While Gu sold her remaining items, her two-year-old daughter played on her own behind the shelves, not worried about what will happen to her family or where she will go to kindergarten, in Beijing or her mother's hometown.

Gu came to the capital three years ago and opened her shop with the help of relatives, but after her business was hit by the local government's recent demolition drive, she has lost what she worked so hard to establish.

"My family is now living with those products in a basement. Hopefully we can sell our stock in a week and find other jobs. Or we might have to return to our hometown as my daughter needs to go to school soon," Gu told the Global Times on Monday.

Gu's shop was demolished in early April, and many other migrants are in the same boat as the Beijing government takes aim at businesses opened at street-level without permits.

The drive to enforce building codes dovetails with the government's policy to cap the capital's population at 23 million by 2020, according to its draft overall plan for 2016-2030 released in March. It says the Beijing government will work to solve the problems caused by overcrowding by "optimizing the population structure and improving population quality."

Gray area

The small alleyways running off Tuanjiehu Road once hosted dozens of businesses located in converted first floor-homes, but now they make a desolate scene with shop doors blocked up with concrete and a few struggling to go on by serving customers through windows.

A restaurant selling dishes from Northwest China's Shaanxi Province now hands out noodles from behind a barred window as two staff members pass out menus.

"My restaurant was torn down yesterday and though we are trying to do take-out for the next few days, we will shut down if we can't make money," said Sun Jing, the owner of the restaurant, which has been open for about 10 years with annual profits reaching up to 400,000 yuan ($58,087).

"The demolitions are forcing out all of my migrant workers, who have no savings or homes here and earn about 3,000 yuan a month," Sun said.

Small businesses like Sun's make up about 35 per cent of the city's economy but only 7.5 per cent of its tax revenues, according to 2011 figures, the most recent available, the London-based Financial Times reported.

"Those small businesses, called 'low-end industries' were widely constructed in Beijing and some other cities since reform and opening-up started in 1979. It was always illegal but the government turned a blind eye," said Niu Fengrui, a research fellow with the Chinese Academy of Social Sciences.

"It was actually a gray area over which government and street committees failed to exercise management, while those businesses, at the same time, offered lots of job opportunities for newcomers to the cities," Niu said.

Bigger picture

While the two restaurant workers tried to drum up business, many of Sun's long time customers came forward to ask what is going. "Are you still open? When you will be closed?" Sun said that she will try to find a new home for the restaurant, legal and cheap.

Small businesses function as "venues for living necessities for nearby residents," and governments cannot simply demolish them and offer no other alternatives for the community, Yin Zhi, dean of the Urban Planning and Design Institute of Tsinghua University, told the Global Times.

In the first three months of 2017, 6,091 businesses and 11.8 million square meters of illegal buildings in Beijing have been demolished, respectively meeting 38 and 29 percent of the city's annual targets, Li Sufang, the deputy director of the Beijing Municipal Commission of Development and Reform, told the media in April.

Along with the demolitions, the city government has relocated migrants and wholesale markets to other cities or counties, with a38 markets in the city center being moved, said Li, without specifying how many people were involved.

Beijing has benefited from the clustering of resources in the city as a consequence of the market economy and administrative preferences, but it has also suffered from the "urban diseases" this has brought including overcrowding and congestion, said Wang Xiaolu, deputy director of the National Economic Research Institute of China Reform Foundation.

The drive to solve "urban diseases" is behind the demolition, Yin said, adding that improving official management also is part of the 2030 plan.